𝗣𝗗𝗙 | The purpose is to note the likelihood of continued growth of internet banking and commerce as individual consumers download more and more products. Internet banking enables customers to save time, take control of their Strategy & Research, 61 million households regularly use Internet banking today, and Internet banking is a subject receiving great attention in the banking industry and the regulatory community. As with other areas of e-commerce, discussions.
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IT use in banking and electronic payment systems. will more and more be carried out by non- and near-banks. These facts represent big challenges for. Outline. Online or Internet banking is a way for customers of a bank to conduct a range of financial transactions through their online banking channel. Online. The first time you log in as a user of Internet Banking, after entering your given report on your personal computer in one of the formats – XML, DOC, PDF, XLS.
Typical recipients were gas, electricity and telephone companies and accounts with other banks.
Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly. After a test period with 2, users starting in , online banking services were launched in ,  using Minitel terminals that were distributed freely to the population by the government.
By , 6.
Online banking was one of the most popular services. In January , the first online banking service was launched by Sumitomo Bank.
Around , banks saw the rising popularity of the internet as an opportunity to advertise their services. Initially, they used the internet as another brochure, without interaction with the customer. Early sites featured pictures of the bank's officers or buildings, and provided customers with maps of branches and ATM locations, phone numbers to call for further information and simple listings of products.
In , Wells Fargo was the first U. That same year, Presidential became the first U. According to research by Online Banking Report, at the end of less than 0.
Electronic Banking in Malaysia: A Note on Evolution of Services and Consumer Reactions
At the beginning of , some 33 million U. To access a financial institution's online banking facility, a customer with internet access will need to register with the institution for the service, and set up a password and other credentials for customer verification.
The credentials for online banking is normally not the same as for telephone or mobile banking. Financial institutions now routinely allocate customers numbers, whether or not customers have indicated an intention to access their online banking facility. Customer numbers are normally not the same as account numbers, because a number of customer accounts can be linked to the one customer number.
Technically, the customer number can be linked to any account with the financial institution that the customer controls, though the financial institution may limit the range of accounts that may be accessed to, say, cheque, savings, loan, credit card and similar accounts. The customer visits the financial institution's secure website , and enters the online banking facility using the customer number and credentials previously set up.
Each financial institution can determine the types of financial transactions which a customer may transact through online banking, but usually includes obtaining account balances, a list of recent transactions, electronic bill payments , financing loans and funds transfers between a customer's or another's accounts.
Most banks set limits on the amounts that may be transacted, and other restrictions. Most banks also enable customers to download copies of bank statements, which can be printed at the customer's premises some banks charge a fee for mailing hard copies of bank statements.
Some banks also enable customers to download transactions directly into the customer's accounting software. The facility may also enable the customer to order a cheque book, statements, report loss of credit cards, stop payment on a cheque, advise change of address and other routine actions.
Online banking facilities typically have many features and capabilities in common, but also have some that are application specific. The common features fall broadly into several categories:. Security of a customer's financial information is very important, without which online banking could not operate. Similarly the reputational risks to banks themselves are important.
The use of a secure website has been almost universally embraced. Though single password authentication is still in use, it by itself is not considered secure enough for online banking in some countries. Basically there are two different security methods in use for online banking:. Attacks on online banking used today are based on deceiving the user to steal login data and valid TANs. Two well known examples for those attacks are phishing and pharming.
A method to attack signature based online banking methods is to manipulate the used software in a way, that correct transactions are shown on the screen and faked transactions are signed in the background.
A U. Computer intrusions increased by percent between the first quarter of and the second. In 80 percent of the cases, the source of the intrusion is unknown but it occurred during online banking, the report states. Another kind of attack is the so-called man-in-the-browser attack, a variation of the man-in-the-middle attack where a Trojan horse permits a remote attacker to secretly modify the destination account number and also the amount in the web browser. As a reaction to advanced security processes allowing the user to cross-check the transaction data on a secure device there are also combined attacks using malware and social engineering to persuade the user himself to transfer money to the fraudsters on the ground of false claims like the claim the bank would require a "test transfer" or the claim a company had falsely transferred money to the user's account and he should "send it back".
The banking industry has also attained a recommendable growth after this period and this sector has undergone a remarkable renovation. The entry of private sector and foreign banks has made this service sector more competitive. To support the hypothesis of this research paper the following factors are taken into consideration which will clear the fact that the internet banking has adversely affected the traditional banking services. Ease and Comfort Internet banking facilitates to complete banking transactions successfully without visiting branch of bank personally.
A customer only has to open the bank website of which he is the customer and after successful login can complete his transaction.
Internet banking is also very much interesting because customers enjoys while completing their transactions with the help of internet banking Davis, When a bank provides a good website with easy language and better contents then it will become more easy and convenient for a customer to use it. Adequate explanations should also be provided by the banks on their website in order to encourage the customers to complete their transactions with no problem Saha, Facilitates Any Time Any Where Banking The fixed time limit of working of banks also promotes the use of internet banking among the customers.
With the use of internet banking a customer can access his bank account details any time and also from anywhere. This facility has adversely affected the traditional banking services. A customer now not needs to interrupt his busy schedule for making personal visit to the bank just for a simple knowledge of collecting account details.
Bank staff has been replaced by the machines to perform the basic functions by the customers like withdrawal of cash, transfer of cash, request for various banking services etc. Now with the help of internet banking a customer can access his account and make transactions even if there is a bank holiday as well as during the non-working hours of the banks in a better way.
A person just sitting in his office or home or from anywhere can enjoy the banking services by using bank website with the help of internet. Now a person can avail fast and better service to pay his electricity bill and other utility bills, pay taxes, transfer funds, pay credit card bills, and enjoy online shopping etc. Helping Customers to Manage Accounts Internet banking enables a customer to manage his personal accounts easily and effectively. A secure and safe website helps a customer to manage all financial transactions effectively with a few clicks.
They can manage their accounts with the help of personal secret information in form of their personal password, address and other important information Adams, Lamptey, Regular Updated Information A customer after competing transaction in a bank get sure about its completion or non completion but this facility is available in case of internet banking because in the mean time an updated information about the status of transaction that whether it is completed or not is received by the customer by means of SMS alert or from the web page of the bank.
The frequent updated information also ensures security to the customer which is highly demanded by the customer while using internet banking.
As a result the risks involved in the transaction also get minimized. In this way communication between the bank and the customer is also improved Wang, User Friendliness or Customization Internet banking is playing a strong role in the development of banking sector and this concept is gaining popularity at a high rate in the bank customers. One of the reasons of increased popularity of internet banking among people is the user friendly services which internet banking is offering to its customers.
The use of multi languages during transactions and use of biometric and voice mail system especially in the rural areas for the illiterate section proves the user friendly approach provided by the banks to their internet banking customers Sharma, Regularly up-to-date services with innovative features are provided to the customers who are using internet banking. In this way a bank is able to retain their old customers and also tries to attract the new ones.
Low Cost Structure The cost involved in the internet banking operations is also least as compared to traditional banking services. As internet banking provide its customers to complete their banking transactions from anywhere and anytime without making personal visit to the bank.
So on the one hand transactions are going on in the brick and mortar bank and on the other side by the customers using internet banking without help of banking staff. So the transaction rate has increased which has a positive impact on the operating performance of the banks.
The banks also have to incur onetime cost to set up the internet banking system and enjoy long term benefit from this cost. From the customer point of view, a customer just with the help of an internet connection and desktop computer or laptop or smart phones can go for his banking transaction without incurring expenses of transportation etc.
So in this way internet banking is useful for the both banks and customers from the cost point of view Hassan, Environment Friendly Approach Internet banking avoids the use of paper documents which are very important in case you are completing your transaction in a physical branch of bank.
So internet banking helps to save papers which in turn help in saving environment. As a customer using internet banking can directly or indirectly participate in the environment protection scheme. Gender of Respondents Table 2: Profession of Respondents Frequency Percent Student 15 The respondents who are not using internet banking. A customer can enjoy banking services without disturbing their Bank staff has been replaced by the machines to perform the basic functions by the customers like withdrawal of cash, transfer The demand of customers is also increasing in the machines A person can avail fast and better services due to internet Internet banking enables a customer to manage his personal Table 1 shows that most of the internet users i.
Only 2. As a result the majority of the respondents are in favor of the statement. Table 2 exhibits that maximum respondent i. Only But These respondents include From the total From the total respondents The respondents who only agreed to the statement are Only 7. But the response of This is one of the question on which least positive response is collected in this study from respondents.
This is the question on which least positive response is collected in this study from respondents as compared to other research questions. The study shows with the response of Internet banking is used as medium to attract new customers as per the But 2.
Maximum respondents are agreed with the research question that internet banking also helps in environment protection as wastage of papers is avoided. Table 7 shows the positive reliability test with value. Hence it can be concluded that the items reliably measure the defined constructs.
Calculated values i. As null hypothesis has been rejected and alternate hypothesis has been accepted.
It adversely affects the use of traditional banking services. Customers find it convenient and easy to use internet banking for availing various banking services instead of going personally in the bank. A study also reveals that the transaction cost is also a main factor which encourages customers to use internet banking as compared to traditional banking services Huang, With the help of this paper we analyzed the following reasons for the increasing use of internet banking among customers and its impact on the traditional banking services: So internet banking helps to save the time of the customer.
This information is provided in the form of SMS or by displaying a message on the web page regarding the status of the completion of service i. Per transaction cost is least in the case of internet banking. The hypothesis developed in this paper is accepted that internet banking has a negative impact on the traditional banking services.
Adams, A. Davis, F. Deitel, H. Hassan, M. Huang, J. Munusamy, J. Ping, C. Saha, P. Sharma, N. Vyas, S. Wang, C. Related Papers. By Shairilizwan Taasim. By seif seif.
By Dr. By Mustapha shehu.This is the major hurdle in internet banking in Malawi. So the transaction rate has increased which has a positive impact on the operating performance of the banks. Internet banking requires huge capital outlay in order to provide a fully fledged internet banking facility.
Stopping Cheque payments is also possible online. The introduction of latest technologies along with the deregulation of the banking sector has attracted new players to make a foray into the industry rapidly and competently. But the response of With SMS Banking: A study also reveals that the transaction cost is also a main factor which encourages customers to use internet banking as compared to traditional banking services Huang, By Shairilizwan Taasim.